New York Moves Closer to Offshore Wind Energy Procurement
On July 12, 2018, the New York State Public Service Commission (“PSC”) issued an Order directing the New York State Energy Research and Development Authority (“NYSERDA”) to begin soliciting bids for approximately 800 MW of offshore wind capacity in the fourth quarter of 2018, taking the State closer to Governor Andrew M. Cuomo’s goal of generating 2,400 MW of offshore wind capacity by 2030. The PSC’s Order builds upon the State’s prior efforts to support offshore wind development in New York, including the issuance of its Offshore Wind Master Plan in January 2018.
Pursuant to the Order, NYSERDA will serve as a procurement agent for offshore wind by procuring Offshore Renewable Energy Credits (“ORECs”) from eligible offshore wind developers on behalf of load-serving entities (“LSEs”) that provide retail electricity in New York. NYSERDA’s solicitation(s) will require two bids, a fixed price for each OREC for the life of the contract (20-25 years), and a “Strike Price” that will be used to calculate an adjustable Index OREC price. NYSERDA will evaluate the bids based on price (70% of the evaluation), economic benefits (20%), and project viability (10%). After NYSERDA procures the ORECs, each LSE will be required to purchase from NYSERDA a percentage of ORECs each year in an amount proportionate to the energy load served by the LSE in the New York control area.
Shortly after the PSC’s Order was issued, NYSERDA published a Request for Information to solicit feedback from offshore wind developers and other interested stakeholders to help develop a Request for Proposals for NYSERDA’s procurement of ORECs. The Request for Information asks for input on a variety of topics, including: procurement schedule; OREC quantity; interconnection and deliverability; OREC pricing options; bid price evaluation; economic benefits; project viability; marine, environmental, and other impacts; eligibility; and contract provisions. The Request for Information comment period closes at 5pm on August 10, 2018.
SPR advised NYSERDA on the development of the Offshore Wind Master Plan and continues to work with NYSERDA on related offshore wind matters. For more information about offshore wind, please contact Dan Chorost, Elizabeth Knauer, Jeff Gracer, or Katherine Ghilain.
* SPR wishes to acknowledge the contributions of Summer Associate Eric Stern to this blog post.